The number of firm bankruptcies is surprisingly low in economies with poor institutions. We study a model of bank …. We show that institutions must improve significantly in order to yield a stable equilibrium in which the optimal number … of firms is liquidated. There is also a range where improving institutions may decrease the number of bad firms …

substitute some functions of missing institutions, for example, enforcing contracts. We investigate this by setting up a model …

positions. In a probabilistic voting model, we show that a lack of financial institutions can lead to more corruption as more … voters become part of the corrupt system. Well-functioning financial institutions, in turn, can increase the political …

intensifies. We find that the better the institutions and the more competitive the banking sector, the higher the bank’s incentive …

countries, communities on both sides of the long-gone Habsburg border have been sharing common formal institutions for a century …